Facebook makes richest tech firm share offering

FACEBOOK FRENZY:A grand total of 421 million shares of common stock are to be sold starting at US$38 a share, with bookmakers and analysts anticipating a stampede

AFP, New York

A photograph released by Facebook shows an interior at the company’s Menlo Park, California, headquarters on Feb. 13.

Photo: AFP / Facebook / Matt Harnack

Facebook yesterday made the -richest-ever share offering for a technology firm, raking in billions of dollars it could wield to dethrone Google as king of the Internet.

Facebook stock priced at US$38 per share was to begin trading under the symbol “FB” on the NASDAQ, giving the world’s leading social network a dizzying value of US$104 billion at its initial public offering (IPO).

The company reportedly planned to go public hacker style with an all-night software bending bash to culminate with Facebook co-founder Mark Zuckerberg remotely ringing the NASDAQ opening bell.

Employees joined in a “hackathon” at Facebook’s offices in the Silicon Valley city of Menlo Park and were to continue until the IPO, at which 421 million shares of common stock were to be sold.

Facebook itself is selling 180 million and holders of previous shares are selling 241 million.

Facebook was on course to raise US$16 billion, making it the richest IPO after financial giant Visa in 2008, according to Renaissance Capital. The addition of a possible stock “over-allotment” could boost the total to about US$18.4 billion.

With a market worth of US$104 billion, Facebook would be among the most valuable US companies, ahead of sector giants like Amazon (US$98 billion) and Cisco (US$89 billion), and more than twice the value of Ford Motor (US$38 billion). However, it remains behind Google (US$203 billion) and Apple (US$495 billion).

Under the share plan, Zuckerberg will hold 55.8 percent of the voting power, and about 18.4 percent of the value of Facebook. The 28-year-old controls the firm through a dual-class stock structure.

Wall Street and investors around the globe have been girding for a Facebook IPO frenzy.

In the past few days, Facebook boosted the estimated price for the shares, and added to the number of shares being offered from insiders.

London bookmakers anticipated a stampede. At the betting firm Spreadex, clients have been speculating that shares could rise above US$56 after their first day.

Wedbush Securities analyst Michael Pachter said he believed that despite the large number of shares being offered, Facebook stock price would climb quickly in trading.

“I would guess it trades a lot higher, and settles in the mid-40s [US dollars],” Pachter said.

Spreadex said that among other tech IPOs, LinkedIn rose 109 percent the first day, while Groupon surged 31 percent. Social game maker Zynga lost ground on its first day.

However, Spreadex spokesman Andy MacKenzie said: “We have had some customers holding back based on their belief that Facebook shares may well fall in value after the furor over the initial launch has died down.”